Smart Money Concept (SMC)

Setup

• Chart: 1-hour or 4-hour candles — no traditional indicators
• Order Block (OB): the last candle before a strong impulse move — the institutional footprint that started the move
• Fair Value Gap (FVG): a 3-candle pattern where candle 1's high < candle 3's low (bullish FVG) or vice versa — an imbalance the market often revisits
• Liquidity: obvious highs/lows where retail stops sit; smart money "sweeps" these before the real move

Entry

Long: after a bullish break-of-structure (BoS — price takes out a recent LH), wait for pullback to a bullish OB or FVG below. Enter on the first bullish reaction candle. Short: mirror after bearish BoS.

Exit

Target = the opposite liquidity pool (equal highs above for longs, equal lows below for shorts). Multiple targets — take partials at each.

Stop-loss

Below the OB's low (long) or above its high (short). Tight — SMC entries are precise.

When it works

• Clean structure with obvious BoS events and identifiable OBs
• Session-open volatility (London/NY open in FX; opening range for Indian equities)
• Traders who can distinguish real OBs from cherry-picked candles

When it fails

• Overfitting the framework to any random candle — everything becomes an "OB"
• Range-bound markets where BoS gets faded repeatedly
• Following SMC without price-action confirmation — the terminology is not magic

General trading rules that apply

Regardless of the specific setup, these apply to every strategy on this site:

• Never risk more than 2% of your account on a single trade
• Place a hard stop-loss before entering — no exceptions
• Journal every trade: setup, reason, outcome, one lesson
• After two consecutive losses, stop for the session
• Backtest and paper-trade for a month before deploying real capital